BILL NUMBER: AB 777	CHAPTERED  10/10/99

	CHAPTER   835
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 8, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 9, 1999
	PASSED THE SENATE   SEPTEMBER 7, 1999
	AMENDED IN SENATE   AUGUST 31, 1999
	AMENDED IN SENATE   AUGUST 16, 1999
	AMENDED IN SENATE   JULY 8, 1999
	AMENDED IN ASSEMBLY   MAY 28, 1999
	AMENDED IN ASSEMBLY   APRIL 14, 1999
	AMENDED IN ASSEMBLY   APRIL 5, 1999

INTRODUCED BY   Assembly Member Cardenas
   (Coauthor:  Senator O'Connell)

                        FEBRUARY 24, 1999

   An act to amend Section 1513 of the Code of Civil Procedure,
relating to escheat.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 777, Cardenas.  Escheat.
   Under the existing Unclaimed Property Law, prescribed deposits or
accounts with a banking or financial organization escheat to the
state when the owner of the deposits or accounts has not, for more
than 3 years, indicated an interest in the deposit, as specified.
Existing law also authorizes the withholding of reasonable service
charges, as specified, for these purposes.
   This bill would provide that these deposits or accounts would not
escheat if the owner has, within 3 years, cashed an interest check,
or owned another deposit or account that is not subject to escheat
and the organization has communicated with the owner regarding that
deposit or account that would otherwise escheat at the address to
which the banking organization has sent communications regarding the
other deposit or account.  The bill would also specify the
requirements for service charges with respect to money orders that
escheat after having been outstanding for more than 7 years.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 1513 of the Code of Civil Procedure is amended
to read:
   1513.  Subject to Sections 1510 and 1511, the following property
held or owing by a business association escheats to this state:
   (a) Except as provided in subdivision (f), any demand, savings, or
matured time deposit, or account subject to a negotiable order of
withdrawal, made with a banking organization, together with any
interest or dividends thereon, excluding, from demand deposits and
accounts subject to a negotiable order of withdrawal only, any
reasonable service charges that may lawfully be withheld and that do
not (where made in this state) exceed those set forth in schedules
filed by the banking organization from time to time with the
Controller, when the owner, for more than three years, has not done
any of the following:
   (1) Increased or decreased the amount of the deposit, cashed an
interest check, or presented the passbook or other similar evidence
of the deposit for the crediting of interest.
   (2) Corresponded electronically or in writing with the banking
organization concerning the deposit.
   (3) Otherwise indicated an interest in the deposit as evidenced by
a memorandum or other record on file with the banking organization.

   A deposit or account shall not, however, escheat to the state if,
during the previous three years, the owner has owned another deposit
or account with the banking organization and, with respect to that
deposit or account, the owner has done any of the acts described in
paragraph (1), (2), or (3), and the banking organization has
communicated electronically or in writing with the owner, at the
address to which communications regarding that deposit or account are
regularly sent, with regard to the deposit or account that would
otherwise escheat under this subdivision.  For purposes of this
subdivision, "communications" means account statements or statements
of interest paid for federal and state income tax purposes.
   No banking organization may discontinue any interest or dividends
on any savings deposit because of the inactivity contemplated by this
section.
   (b) Except as provided in subdivision (f), any demand, savings, or
matured time deposit, or matured investment certificate, or account
subject to a negotiable order of withdrawal, or other interest in a
financial organization or any deposit made therewith, and any
interest or dividends thereon, excluding, from demand deposits and
accounts subject to a negotiable order of withdrawal only, any
reasonable service charges that may lawfully be withheld and that do
not (where made in this state) exceed those set forth in schedules
filed by the financial organization from time to time with the
Controller, when the owner, for more than three years, has not done
any of the following:
   (1) Increased or decreased the amount of the funds or deposit,
cashed an interest check, or presented an appropriate record for the
crediting of interest or dividends.
   (2) Corresponded electronically or in writing with the financial
organization concerning the funds or deposit.
   (3) Otherwise indicated an interest in the funds or deposit as
evidenced by a memorandum or other record on file with the financial
organization.
   A deposit or account shall not, however, escheat to the state if,
during the previous three years, the owner has owned another deposit
or account with the financial organization and, with respect to that
deposit or account, the owner has done any of the acts described in
paragraph (1), (2), or (3), and the financial organization has
communicated electronically or in writing with the owner, at the
address to which communications regarding that deposit or account are
regularly sent, with regard to the deposit or account that would
otherwise escheat under this subdivision.  For purposes of this
subdivision, "communications" means account statements or statements
of interest paid for federal and state income tax purposes.
   No financial organization may discontinue any interest or
dividends on any funds paid toward purchase of shares or other
interest, or on any deposit, because of the inactivity contemplated
by this section.
   (c) Any sum payable on a traveler's check issued by a business
association that has been outstanding for more than 15 years from the
date of its issuance, when the owner, for more than 15 years, has
not corresponded in writing with the business association concerning
it, or otherwise indicated an interest as evidenced by a memorandum
or other record on file with the association.
   (d) Any sum payable on any other written instrument on which a
banking or financial organization is directly liable, including, by
way of illustration but not of limitation, any draft or certified
check, that has been outstanding for more than five years from the
date it was payable, or from the date of its issuance if payable on
demand, when the owner, for more than five years, has not
corresponded electronically or in writing with the banking or
financial organization concerning it, or otherwise indicated an
interest as evidenced by a memorandum or other record on file with
the banking or financial organization.
   (e) Any sum payable on a money order issued by a business
association (including a banking or financial organization), that has
been outstanding for more than seven years from the date it was
payable, or from the date of its issuance if payable on demand,
excluding any reasonable service charges that may lawfully be
withheld and that do not, when made in this state, exceed those set
forth in schedules filed by the business association from time to
time with the Controller, when the owner, for more than seven years,
has not corresponded electronically or in writing with the business
association, banking, or financial organization concerning it, or
otherwise indicated an interest as evidenced by a memorandum or other
record on file with the business association.  For the purposes of
this subdivision, "reasonable service charge" means a service charge
that meets all of the following requirements:
   (1) It is uniformly applied to all of the issuer's money orders.
   (2) It is clearly disclosed to the purchaser at the time of
purchase and to the recipient of the money order.
   (3) It does not begin to accrue until three years after the
purchase date, and it stops accruing after the value of the money
order escheats.
   (4) It is permitted by contract between the issuer and the
purchaser.
   (5) It does not exceed 25 cents ($0.25) per month or the aggregate
amount of twenty-one dollars ($21).
   (f) Any funds held by a business association in an individual
retirement account or under a retirement plan for self-employed
individuals or similar account or plan established pursuant to the
internal revenue laws of the United States or of this state, when the
owner, for more than three years after the funds become payable or
distributable, has not done any of the following:
   (1) Increased or decreased the principal.
   (2) Accepted payment of principal or income.
   (3) Corresponded electronically or in writing concerning the
property or otherwise indicated an interest.
   These funds are not payable or distributable within the meaning of
this subdivision unless, under the terms of the account or plan,
distribution of all or a part of the funds would then be mandatory.
   (g) For purposes of this section "service charges" means service
charges imposed because of the inactivity contemplated by this
section.
